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Many money managers get paid a percentage of the assets they manage for you, which can be a bad deal once you’re drawing down, rather than building up.

Listener Shawna is approaching retirement, and she's looking for a way to cut the amount she'll pay her financial advisors as she shifts gears. Considering that her annual fees could be the equivalent of 25% of what she's withdrawing from her nest egg each year, she has a point. Fortunately, as Alison Southwick and Robert Brokamp explain in this segment of Motley Fool Answers, it's not that hard to pivot away from that high-priced advisor to a more fiscally friendly option.

A full transcript follows the video.

This podcast was recorded on Sept. 20, 2016

Alison Southwick: It's time for Answers Answers, and today's letter comes from Shawna. Shawna writes: "I have a dilemma. I have been a Stock Advisor member for years, and as we approach retirement, I realize that the management fees I pay our investment advisors will be about 25% of the amount we withdraw each year. I know this is too much to pay out, but I'm not sure how to transition out of a managed retirement account to a self-directed one with Motley Fool advice. It wouldn't make sense to sell everything and start over. What have others in this circumstance done?"

Robert Brokamp: Well, hello, Shawna. First of all, I want to make everyone aware of what Stock Advisor is. It is one of the newsletters you can subscribe to here at The Motley Fool. Our flagship newsletter. And I'm going to take a guess, Shawna, why you are estimating that you're going to pay about 25% of your portfolio withdrawals in retirement to your financial advisor.

And that's because many people have heard of the rule of thumb of how much you can take out of your portfolio in retirement. It's called a safe withdrawalrate,and that rule of thumb is 4%. Some people think that nowadays it should be a little higher, and some people think lower, but still a good rule of thumb. So you take that out in your first year of retirement, and then you adjust it for inflation afterwards.

But you also have a financial advisor, and a common way to pay a financial advisor is an annual fee. These days, the average is around 1%, so if you're going to take out 4%, but you're paying an advisor 1%, that's a large percentage of your retirement income.

Southwick: Yes!

Brokamp: So I think you're right to be concerned about this. And you're also right because if you look at the studies that determine this 4% safe withdrawal rate (and again, other studies will have it a little higher or a little lower), most of them either didn't incorporate the fees that you pay advisors, or they assumed the fees would be like 0.2% [and that] you're investing in index funds. When you then incorporate a fee like 1% to a financial advisor, the safe withdrawal rate actually goes down quite significantly. So it is an important thing to consider.

So my first piece of advice to you is to evaluate the investment advisor. It sounds to me like you're not satisfied, so you should definitely move on, but for anyone else in that situation, you want to see, first of all, whether they are providing superior investment advice (the stock investments are beating a relative stock index or bond investments are beating a relative bond index). Are they providing other types of advice that you find valuable? Maybe they're providing tax advice. Maybe they're helping you determine how much you can spend in retirement. Maybe they're answering questions about life insurance.

You should evaluate all that, and if they're doing a good job, that's worth something, and you should pay them. But if not, you can transfer the account either to another financial advisor or to a brokerage account that you direct yourself. There's no need to sell everything. You can transfer it. Go find the new financial advisor, or the new discount brokerage, and say, "I want to transfer my account here," and they will initiate the process.

In industry parlance, it's called an ACAT (an account transfer). They will bring the investments over. Most investments will come over. Certainly individual stocks and common funds. Sometimes some won't. For example, it you're with a company and a financial advisor recommended to you a fund that only their company offers -- if it's a proprietary investment like that -- it might need to be sold. But the vast majority of investments can come straight over. You don't need to sell them.

The one thing I would say is you want to get all your cost basis information before you move, because sometimes cost basis information does not come over.

Southwick: What do you mean by cost basis information?

Brokamp: That is the amount you paid for the investment. So if you paid $10 for it 10 or 20 years ago, you want to make sure you have that information so that when you sell it, you have that so you can calculate the capital gains. It does not matter if it's in an IRA or 401(k). If that's the case, don't worry about it. And with anything that you've bought recently, the cost basis information has to come over, but for older investments, a lot of the information could get lost when you go to a new account.

But there's no reason to stay with a bad financial advisor. Choose a better option and transfer the account. You don't need to sell everything.